The central provinces of China, which are struggling to pluck
their sinking economy up by the bootstraps, should work more
closely with each other, a chief planning official said
yesterday.
To encourage such integration, the National Development and
Reform Commission (NDRC) is preparing to set up an office to help
guide development in the central region, said Fan Hengshan, the
director of the NDRC's Department of Regional Economy.
The regional office will be directly under the State Council,
which is China's cabinet, and is expected to function like the
State Council offices dedicated to promoting the development of the
western and northeastern regions, experts said.
The move is in line with the State Council's strategy to
encourage the "rise" of the central provinces Shanxi, Anhui,
Jiangxi, Henan, Hubei and Hunan which are home to at least a
quarter of the country's population, Fan said.
The last region to be covered by a national development plan,
the central provinces have, in terms of per capita gross domestic
product growth, lagged behind not only those on the eastern coast,
which opened up in the 1980s, but also their neighbors to the west,
which have benefited from a "go-west" scheme since the late
1990s.
The combined foreign trade volume of the country's six central
provinces accounted for less than 3 percent of the national total
in 2005. They are home to only 671 overseas-financed enterprises,
or 5 percent of China's total, according to a development report
published recently by the Social Sciences Academic Press.
Grain supply
Looking to harness the region's comparative advantages, the
central government is planning to develop its commodity grain
supply, energy and raw materials, modern equipment manufacturing
and high-tech industries. The government will also build
communication hubs there, according to the report.
The report also said that compared with China's west, it will be
much cheaper to develop the central region's agriculture, energy
and mineral resources.
And compared with the east, labor and land are much cheaper in
the central provinces, making them an ideal destination for
industries shifting from the eastern coast and from abroad.
The report said the six central provinces have for many years
worked at cross-purposes, and regional protectionism has prevailed.
And the industries that are active within the individual provinces
tend to be similar to those in other provinces, rather than
complementing them, according to the report, which was released two
weeks ago in Beijing.
"Unity is strength, and coordinated they will rise," Fan said.
"Unity and coordination are realistic choices that will lead to the
revival of the central region."
He said the central provinces should step up regional
integration by reforming their administrative systems to facilitate
market competition and curb the amount of government interference
in business.
Public finance
Fan said the region should set up a sound system of public
finance to ensure local governments have the funds they need
without having to make money by meddling in the affairs of
businesses or closing local markets to outsiders.
Local-level leaders should realize the importance of mutual
coordination and strive to build the central region into a unified
market, where resources can cross provincial boundaries and flow
freely to where they are most needed, he said.
By implementing a coordinated development strategy, the six
provinces can standardize the design and construction of
infrastructure projects, eliminate redundant production capacity
and avoid cut-throat competition. Such steps will help the central
provinces narrow the gap between themselves and the eastern coast,
he said.
Zhao Lingyun, president of the Hubei Provincial Academy of
Social Sciences, said he expected the coordinating body to come up
with concrete policies for the growth of the region, perhaps by
implementing some of the preferential policies used to boost
development in West China and Northeast China.
Fan said that numerous supportive policies were in the pipeline
for the central region, and that joint meetings among officials
from the six provinces and other regional economic cooperation
mechanisms were on the horizon.
However, even with outside support, the central provinces must
rely on themselves to attain prosperity, he said.
(China Daily January 16, 2007)